The theme of this iteration of the House GOP budget is ‘balance,’ as in balanced budget, what I’ve seen some on Twitter describe as framing designed to retake the White House’s legitimacy over popular conceptions of whatever balance means. So if you watched the press conference yesterday (excuse; I’m on spring break) of Paul Ryan et al. you may have heard something like this; “We think we owe the American people a balanced budget,” or “We can’t keep spending money we don’t have, that’s the basic acknowledgement when you’re budgeting.” And then he goes on to compare the federal government to households, businesses, etc; the usual rhetorical framing.
That last part is especially galling, because none of that is particularly true. Or even kinda true. Two general points on such comparisons: 1) The federal government is not a household. Full stop. The federal government is not a household. Nor is it a business, either. 2) If you must make the analogy (which I beg of you, please do not) then it’s worth pointing out incessantly that most households don’t balance their budgets every year. If and when people sit down to make a budget, access to credit is usually included in that process. Which is to say, the amount of debt we can incur is often included as the money we have to spend. Otherwise people would rarely buy houses. When I had a middle-class income I bought a car with money Paul Ryan would say I didn’t have. That year I was, technically, far far into the red. Yet the credit markets that year deemed it acceptable to vastly increase my purchasing abilities. The same thing happens to the federal government except where I was paying six percent interest, the feds are currently paying 1.4 percent for a comparable term, less than near term inflation expectations.
All of that is, again, besides the point because households do not print their own money, which in and of itself renders the whole exercise moot. That the comparison is mostly a failure even if that is ignored should tell you the utility of the whole process. Yet Ryan’s argument after saying that he believes they “owe the American people a balanced budget” is entirely an exercise of proving this a-priori assumption.
Don’t misunderstand me though, it’s not that I don’t ‘get’ the rhetorical and moral value of a balanced budget as a political argument. I do, but ultimately it has no basis in the world as it exists now or even in long-run history of the federal government, as Evan Soltas explains here:
The U.S. federal government doesn’t actually need to balance its budget. Ever. Really. We could run a budget deficit every year for the next century. We’d be just fine.
How do we know? Well, for one thing, we’ve basically always done that. Between 1929 and 2013, the average federal budget deficit as a percentage of gross domestic product has been 3.1 percent. Over those 84 years, we’ve run 70 budget deficits and 14 budget surpluses.
Really. As Evan’s headline says, we can run deficits forever. Where you get into the substantive debate is over what level and under what conditions. Yet similar to what I wrote yesterday, this isn’t the conversation Washington is having. The debate is, or at least the opening salvo of budgets are, between a radical reimagining of government’s structure and bringing the debt and deficit towards a more sustainable level. Now the former is a solution that is, as the president said earlier, a goal for its own sake. The latter, however, is an approach that seems to target a more reasonable solution of shrinking the debt-to-GDP ratio. This is done without throwing out the baby with the bathwater, sort to speak. So as of now Paul Ryan’s balanced budget idea is simply a arbitrarily constructed object divorced from reality. It is, in effect, the budgetary spoon of politics. It’s on the rest of us to remember that there is no spoon.